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2019 (7) TMI 508 - Tri - Insolvency and BankruptcyAdmissibility of petition - Initiation of Corporate Insolvency Resolution Process - existence of debt or not - section 7 of The Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The scheme of the code is to ensure that when a default takes place, in the sense that a debt become due and is not paid, the Insolvency Resolution Process begins. Default is defined in Section 3(12) in very wide terms as meaning non-payment of a debt once it become due and payable, which includes non-payment of even part thereof or an instalment amount. The meaning of ‘debt’ as per Section 3(11) is liability or obligation in respect of a ‘claim’ and the meaning of ‘claim’, as per Section 3(6) means a right to payment even if it is disputed. The Code gets triggered the moment default is rupees one lakh or more (Sec. 4). Initiation of Corporate Insolvency Resolution Process under Section 7 or 9 do not amount to recovery proceedings, the question of deciding the claim which may include the interest by the Adjudicating Authority does not arise for the purpose of triggering the Corporate Insolvency Resolution Process. It is clear that the application being complete and in absence of any other infirmity, and the corporate debtor having not denied the debt and default, the adjudicating authority cannot reject the application preferred by the appellant company - there is admitted debt and efforts are/were being made by the respondent to come out of the financial obligations. Existence of default - HELD THAT:- There is no dispute in the case that the petitioner is the financial creditor - On perusal of record, it is held that there is existence of default. The application under Section 7(2) of the Code is also complete in all respect. The petitioner/financial creditor having fulfilled all the requirements of Section 7 of the Code, the instant petition deserves to be admitted - Petition admitted - moratorium declared.
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